Asian equities were mixed as investors shift their attention to economic data for clues on the Federal Reserve's interest-rate path.
U.S. inflation data due later Wednesday "will be the key test of whether the recent repricing toward a Fed hold in October can be sustained," MUFG's Michael Wan said in a note.
New York Fed President John Williams said Tuesday that it may be appropriate for the Fed to raise interest rates once more this year, adding that the one thing he is watching the closest is artificial-intelligence-fueled inflation.
Still, while markets price a strong probability of a Fed rate hike before the year-end, an October move seems less likely, said Thadeu dos Santos at Infinox. Instead, "a stronger inflation print could reinforce expectations for December tightening and lift yields and the dollar, while softer data could make another move less certain," he said.
Economists surveyed by The Wall Street Journal expect the consumer-price index to increase 3.6% from a year ago for September, quickening from August's 3.4% rise.
Higher interest rates typically increase corporate borrowing costs and weigh on earnings, making stocks less attractive.
Meanwhile, markets are digesting China's September inflation and trade numbers released Wednesday. Resilient trade data from China and continued Chinese central bank support could buoy regional sentiment, although a sharper slowdown in imports could renew concerns about local demand, said MUFG's Wan.
Regional equities were mixed. South Korea's Kospi rebounded, rising 1.1%, after a recent semiconductor-led selloff. Hong Kong's Hang Seng Index edged 0.2% higher and Japan's Nikkei Stock Average rose 0.8%. China's Shanghai Composite Index was flat.
Singapore's FTSE Straits Times Index fell 0.2% after the city-state's central bank unexpectedly held its monetary-policy settings at its October meeting.
In energy markets, crude-oil futures gained amid simmering tensions in the Middle East, raising concerns around supply disruptions. Front-month West Texas Intermediate and Brent crude each rose 0.6% to $94.74 a barrel and $106.31 a barrel, respectively.
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